House of Commons - Environmental Audit

Select Committee on Environmental Audit Fourth Report

The Government's Response

1. We published our First Report of Session 2007-08, Are biofuels sustainable? on 21 January 2008.[1] The Government sent us its response on 28 March; we have reproduced it as an appendix to this report. We considered the response in detail and welcome the Government's recognition that there is a role for biofuels providing they are cost-effective and sustainable.[2] We also welcome the review into the wider economic and environmental impacts of biofuel production.[3] However, we have significant concerns about the Government's rejection of our call for a moratorium on polices aimed at increasing the use of biofuels.[4] Other commentators have raised similar concerns about support for biofuels, including the European Environment Agency,[5] the International Monetary Fund,[6] the International Assessment of Agricultural Knowledge, Science and Technology for Development[7] and the Government's Chief Scientist.[8] On 24 March Professor Robert Watson, the UK's Chief Environment Scientist, called for implementation of the RTFO to be delayed until further work had been done on sustainability.[9] Even a joint statement issued by the Downing Street Food Price Summit, hosted by the Prime Minister, recognised the need to review the approach to biofuels and look closely at their impact on food prices 'to ensure we are more selective in our support'.[10]

2. In their response, the Government argued against a moratorium because:

targets were set at an 'appropriately cautious level';
an opportunity to make carbon savings from biofuels would be missed; and
it would mean reneging on an earlier commitment on the back of which investment decisions have been made.[11]

We do not accept that these arguments are sufficient to dismiss the case for a moratorium.

3. We disagree that targets for biofuels have been set at an 'appropriately cautious level'.[12] While the UK has the theoretical capacity to produce enough sustainable biofuels to meet the current 2.5% target, the ultimate source of biofuels is uncertain. These are globally traded commodities and therefore the proportion of domestically sourced feedstocks used to reach the target will be determined by the market.[13] Further to this, the Government plans to increase the target to 5% and therefore exceed the theoretical capacity of the UK to supply sustainable biofuels (the UK only has the capacity to produce half of the 5% target in a sustainable manner.) Meeting the full target without using imports would require anywhere between 10% and 45% of UK arable land area.[14] There is evidence that even modest targets on biofuels have had an impact on land-use and food prices. There is already pressure from the European Union to increase targets for biofuels in spite of all the evidence of their potential for harm.[15] We will be seeking a clarification of the European Commission's position.

4. We agree that robust measures to reduce emissions are needed. However, we do not accept that biofuels are an essential component of the UK's response, with Government estimates indicating that they will deliver 5.5-6.5% of the expected emissions reductions in 2010.[16] As this figure fails to take into account the emissions generated from the production of biofuels produced abroad, on which we will have to rely to meet the 5% target, the actual emission reductions could be around a third less. As we outlined in our report, biofuels are not a particularly cost-effective way of reducing emissions (we found that other forms of bioenergy can often reduce emissions by greater amounts, more sustainably and at a lower cost than current policy on biofuels).[17] Even more seriously, they could lead to increases in greenhouse gas emissions from land use change.[18]

5. The Government argued that it would have been wrong to implement a moratorium as it would have meant reneging on earlier commitments to industry. It pointed out that investment decisions had already been taken on the basis of these commitments. We recognise the concern for those that might have already invested in biofuels. But this concern is outweighed by concerns about the potential harm that could arise if the development of biofuels continues without the necessary safeguards. It will be much harder to take decisions about biofuels once an industry has fully established itself on a basis that may not be fully sustainable.

6. We accept there is a need for policy instruments that stimulate the development of more efficient and effective biofuels. The Royal Society was clear that current policy is inadequate in this regard. It argued that the main effect of the current policy will be to 'encourage the import of fuels from abroad and the domestic production of crops and fuels with low CO₂-equivalent savings'. It found that the lack of banding in the incentive structure will mean that investment will flow to 'more established near term options… and little to the more promising long-term options'.[19] The Government must look again at how to stimulate the development of second generation biofuels; support for first generation biofuels might not have the desired effect and any benefit could be outweighed by the potential for harm that exists in the absence of proper standards for sustainability. As we said in our report, transport biofuels have received 'disproportionate attention and funding in comparison to other policies that could reduce greenhouse gas emissions at lower environmental risk and lower cost'.[20] The evidence to our inquiry highlighted policies aimed at changing travel behaviour ('Smarter Choices'), improving vehicle fuel efficiency, encouraging more fuel-efficient driving and shifting the balance of affordability more in favour of lower carbon transport modes.[21]

7. In its response to our recommendation about the importance of sustainability standards and the need to protect carbon sinks (such as forests) the Government stressed the role that standards play.[22] We believe that the development of biofuels could continue where: (i) sustainability standards are in place and enforced; and (ii) there is wider action to prevent damaging land use change. Neither of these conditions is met currently. Standards for biofuels will not be in place until 2011 at the earliest, and effective mechanisms to protect forests will not be in place until after 2012 even if they can be agreed as part of a post-Kyoto agreement. We believe that it is dangerous to push forward with this policy in the absence of adequate information or effective safeguards. Doing so contradicts the precautionary principle agreed at the Earth Summit in Rio.[23] It is also contrary to the findings of the UN Millennium Ecosystem Assessment that, in order to tackle substantial and irreversible loss of biodiversity, significant changes in practices were required, including 'proactive action to address environmental problems before their full consequences are experienced'.[24]

8. Without standards for sustainability and safeguards to protect carbon sinks we believe policies that encourage demand for first generation biofuels are damaging. We reiterate our case for a moratorium on policies aimed at increasing the use of biofuels and urge the Government to resist attempts to increase EU biofuel targets. The review of biofuels announced by the Government is important, and it would be a mistake to press ahead in the absence of the information needed to inform effective decision making.

1 Environmental Audit Committee, First Report of Session 2007-08, Are biofuels sustainable?, HC 76 Back

2 Government response to recommendation 1-see appendix, page 6 Back

3 Government response to recommendation 3-see appendix, page 6 Back

4 Environmental Audit Committee, Are biofuels sustainable?, paragraph 34 Back

5 www.eea.europa.eu/ Back

6 'Biofuel Demand Pushes Up Food Prices' IMF, October 2007, www.imf.org/external/pubs/ft/survey/so/2007/RES1017A.htm Back

7 www.agassessment.org/ Back

8 'Rush for biofuels threatens starvation on a global scale', The Times, 7 March 2008 Back

9 'Call for delay to biofuels policy', BBC News, 24 March 2008, news.bbc.co.uk/1/hi/sci/tech/7309099.stm Back

10 The Prime Minister, Article on food prices summit (22 April 2008), Downing Street website (www.pm.gov.uk) Back

11 Government response to recommendation 6-see appendix, page 7 Back

12 Government response to recommendation 6-see appendix, page 7 Back